Politics and International Affairs and the quest for the ulterior motive.

Tuesday, January 15, 2008

India - China : Static Movement

The prime minister concluded his visit to China, where amongst other dignitaries he met with President Hu Jintao and his premier Wen Jiabao. The high profile delegation included the commerce minister Kamal Nath, foreign secretary Shiv Shankar Menon and the National Security Advisor, M.K. Narayanan. The visit was broadly a three pronged approach that included – economic and trade relations, security and strategic relations and energy security. For all the hype that surrounded the visit and the quest to improve the decades old cold relations between the two countries, this visit was not particularly looked at a summit that would or could solve all outstanding issues. At best, this visit was to signify the importance of a continued dialogue between the two countries not only to resolve all outstanding disputes but also to seek common ground for co-operation. However, for all the rhetoric and positive bonhomie that the joint statement issued by Prime Minister Manmohan Singh and premier Wen Jiabao reflected, there is no denying the fact relations between China and India remain at best cordial and more or less static. India seems to have conceded far too much in this process and has gained little economically or strategically under the UPA’s “Look East” and “One China Policy”. This visit can at best be rated average for the outcomes it failed to achieve, but promises, nevertheless, it got attested on paper.

The economic and trade relations between the two countries seems to now overtake all other matters between India and China. The two sides have made an ambitious target of achieving $60 billion worth of trade between the two countries by 2010. The current projected levels are at $40 billion at best by 2010 by most economic analysts. Then again the $60 billion target is not adequately transparent, as it does not signify the share ratio between imports and exports between the two countries, and also does not factor in the under valuation of the Yuan which hits both Indian imports and exports. The trade deficit between the two countries is in the negative for India and with India increasing cheap imports from China manifolds, the deficit will continue to rise. In that case, the Indian side needs to step up the pressure on China to remove trade barriers between the countries that are currently set unfavorably towards India. The joint statement also touched upon working out a Regional Trade Agreement between the two countries. This too must not be rushed into without adequate safeguards to ensure that India does not become a dumping ground for Chinese goods at the cost of the Indian manufacturing sector. Also, the Regional Trade Agreement must include a product safety clause between the two countries. Last year, the United States was flooded with Chinese products that were produced using poisonous substances like lead which caused an outrage and forced China to review its manufacturing policies and quality control standards. Surely, this issue must figure strongly in any future Regional Trade Agreement. The cause for concern vis-à-vis trade remains in the ambivalence towards action by the Chinese. So while India readily agreed to give licenses for Chinese airlines to carry cargo and flights within the Indian airspace, the Chinese never reciprocated the same with Jet Airways, making only conciliatory noises to the effect.

Security and strategic relations has been the thousand pound gorilla in the room for any move towards friendly relations. The border issue and the breeches on the Line of Actual Control seem to go on endlessly. China still does not recognize Arunachal Pradesh as a part of India and remains ambivalent on Aksai Chin. There again, India seems to have given the Chinese a long leash, with the prime minister trying to divide border disputes on ‘populated areas’ basis. This sort of differentiation will hurt India in the years to come, as China may ask for a quid pro quo to settle the Arunachal issue by demanding Aksai Chin to become a part of China. We made the same mistake with the “One China” policy. By making Tibet an undisputed part of China, we not only stepped back from the overt support given by successive government’s right since Nehru to the Dalai Lama, we never got anything in return for this recognition. The understanding for Tibet to become part of China was to ensure that Arunachal Pradesh too became a part of India, however, China till as late as a few months ago still keenly contests India’s “claim” over Arunachal. The Tibetan faux pas was cleverly exploited by China and they connected Lhasa to the Chinese heartland and pumped in goods and materials that the desolate area had never seen. And by dangling the carrots the Chinese establishment effectively made the residents of Tibet move away from the message of the Dalai Lama. The joint statement did make some positive noises about India’s aspirations for the United Nations Security Council. This on its own is a welcome step, but will need a concerted effort by India and other aspirants to see the light of day. The Chinese help, though welcomed, does not go far enough and for India to find itself at the high table anytime soon, seems fanciful. Terrorism too finds a notional mention in the joint statement and here again the Chinese have not done much to help India’s cause by coming down strongly against Pakistan’s state sponsored terrorism. The Chinese are a crucial ally of Pakistan and have for decades now passively watched the ISI and Pakistani army indulge in the promotion and protection of terrorism. It might have suited the Chinese to watch India embroiled in fighting terrorism, but with an unstable Pakistan possibly affecting Chinese interests in Pakistan, the scourge is a matter of concern for both sides. The Chinese also did not take too well to the joint military exercises between India, Australia, United States and Japan last year and an alarmed government decided to initiate military exercises with the Chinese late last year. Such shifting of strategies seems to represent a knee jerk reaction approach towards military policy. India must weigh in the pros and cons of military exercises with multiple nations and formulate a comprehensive and contiguous policy on how it approach military co-operation.

Energy security and climate change are the only two issues that see the two sides speaking virtually the same language. Both are an area of concern. A growing economy and a richer middle class have put pressures on India and China to ensure energy supply and security to fuel this growth. The result on the environment has been a reflection of this economic spurt. Both sides need to address both issues together, since whether we like it or not, India and China both feature hyphenated in climate change talks as being the major culprits behind global warming. It is in the best interest of both countries to work on this key issue together. Here too India needs to take a lesson out of Chinese foreign policy. The effective security of fuel supplies by investing in Africa seems to have paid off, and today the skyscrapers in Shanghai and Beijing owe much to sub-Saharan Africa for their existence. There is a lesson in the advantages of being the first mover in energy security, where limited resources have many suitors, India being the one of the biggest.

So, at the end of the three day visit, the prime minister can look back at his trip and be moderately optimistic about what he has achieved. He did not set out to solve all the problems; he went to China to make sure both sides keep talking. But then relations between the two countries under Prime Minister Manmohan Singh have remained just that – talk.